More Ethanol Use Will Help Eat Up Big Corn Supply

Apr 04, 2016

U.S. Department of Agriculture Spring Planting Intentions Report shows the corn industry must step up efforts to aggressively seek to remove barriers to market access and to limit cost-inflating regulations. With the expected 93.6 million acres planted to corn this year, a safe assumption would be a correlated increase in corn supply and a related decrease in price. “Corn farmer profitability really is our bottom line at Illinois Corn,” said ICGA President Jeff Jarboe, a family farmer from Loda. “We are keenly aware that margins are getting tighter for many, and unfortunately, some are already in the red,” Jarboe continued. “We’re always looking for ways to support corn prices and improve profitability. In times like these, however, we’ve sharpened our pencils at ICGA as we consider policy and regulatory situations and initiatives.”

Unfortunately, the wheels of government are slow and the market moves quickly. That said, ICGA says there are a few areas that could support corn prices with a shorter turnaround. For example, bringing more ethanol into the marketplace can build demand locally and beyond. For every 3 gallons of ethanol used, that’s another bushel or so of corn grind. “ICGA is working to remove arbitrary barriers to market access for corn ethanol. This includes our work on achieving the RVP waiver for E15, for example,” Jarboe explained.

ICGA works closely with the Illinois Corn Marketing Board (ICMB) and appreciates the work of ICMB using corn checkoff dollars to build corn demand through ethanol markets. Recently, the two organizations collaborated to secure an $11.97 million grant from the U.S. Department of Agriculture’s Biofuels Infrastructure Partnership (BIP). The BIP grant monies coming into Illinois, matched in a public-private partnership, will bring an estimated $43 million in total investment geared to improving fueling infrastructure to include E15, E85, and other higher blends of ethanol. “The Illinois corn checkoff has done great work leveraging monies with private industry and at the federal level to make ethanol more available at pumps in Illinois,” Jarboe added. The BIP investment is expected to mean more than 500 new fuel dispenser in Illinois capable of pumping E15 at a minimum. These pumps, although planned statewide, are focused in high volume fuel sales areas in the Chicago metro area.

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